An Overview of the Uses of an Holistic QMS Standard for ......Norsk Hydro ASA Complexity of Oil &...
Transcript of An Overview of the Uses of an Holistic QMS Standard for ......Norsk Hydro ASA Complexity of Oil &...
An Overview of the Uses of an An Overview of the Uses of an Holistic QMS Standard for Holistic QMS Standard for
Improved Operational Performance in Improved Operational Performance in the Oil & Gas Industriesthe Oil & Gas Industries
James L. GoodingEnterprise Management Solutions
Black & Veatch Corp.September 16, 2008
Sep 16, 2008Page - 2 Holistic QMS Standards for the Oil & Gas Industries
Topics
Overview of the Oil & Gas IndustriesIndustry segmentation through the Carbon Value Chain
Globalization of markets and infrastructure
Complexity of projects
QMS Standards in PracticeChallenges for unified (holistic) QMS standards
Recent history of QMS standards for the oil & gas industries
Value of further harmonization of standards
Summary
Sep 16, 2008Page - 3 Holistic QMS Standards for the Oil & Gas Industries
Topics
Overview of the Oil & Gas IndustriesIndustry segmentation through the Carbon Value ChainIndustry segmentation through the Carbon Value Chain
Globalization of markets and infrastructure
Complexity of projects
QMS Standards in PracticeChallenges for unified (holistic) QMS standards
Recent history of QMS standards for the oil & gas industries
Value of further harmonization of standards
Summary
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The New Carbon Value Chain
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Carbon Industry Segmentation: Upstream
Upstream EnergyUpstream Energy1.1. Extraction of natural carbon from Extraction of natural carbon from
EarthEarth’’s subs sub--surfacesurface2.2. Transportation of raw, natural Transportation of raw, natural
carbon to facilities where it can be carbon to facilities where it can be refinedrefined
Examples:− Oil & gas exploration & production− Oil & gas pipelines− Oil tankers− Coal mining− Coal barges & trains
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Carbon Industry Segmentation: Midstream
Midstream EnergyMidstream Energy3.3. Refinement of raw carbon into marketable commodities Refinement of raw carbon into marketable commodities 4.4. Transportation of carbon commodities to marketsTransportation of carbon commodities to marketsExamples:− Oil refineries− Petrochemical plants− Natural gas processing plants− Pipelines− Product storage facilities− Natural gas liquefaction plants− Liquefied natural gas (LNG) tankers
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Carbon Industry Segmentation: Downstream
Downstream EnergyDownstream Energy5.5. EndEnd--user distribution or consumption user distribution or consumption
of carbon commoditiesof carbon commoditiesa)a) Fuel to provide heatingFuel to provide heatingb)b) Fuel to generate electrical powerFuel to generate electrical powerc)c) Fuel to transport goods or peopleFuel to transport goods or peopled)d) Raw material for manufacturingRaw material for manufacturing
Examples:− Natural gas distribution companies− Electric power plants− Planes, trains & automobiles− Fertilizer, plastics & pharmaceutical
manufacturing
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Industrial Contrast of Gas vs. Oil
Oil Play(with
Associated Gas)
Natural Gas Play(no Oil)
Gas Processing
Plant
Gas Liquefaction
Plant
Refinery or Petrochemical
Plant
Refined-Product Markets
NGL Markets
NG Markets
Pipelines & Ocean Tankers
Pipelines, Ocean Tankers
& Trucking
Oil
Wet Gas
Dry Natural Gas (NG)
Natural Gas Liquids (NGLs)
Pipelines
Ocean Tankers
Liquid Fuels & Chemical
Feedstocks
Pipelines
Pipelines
Pipelines
Sep 16, 2008Page - 9 Holistic QMS Standards for the Oil & Gas Industries
Topics
Overview of the Oil & Gas IndustriesIndustry segmentation through the Carbon Value Chain
Globalization of markets and infrastructureGlobalization of markets and infrastructure
Complexity of projects
QMS Standards in PracticeChallenges for unified (holistic) QMS standards
Recent history of QMS standards for the oil & gas industries
Value of further harmonization of standards
Summary
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Globalization of Crude Oil Markets
Source: BP Statistical Review of World Energy 2008
1 Tonne = 7.33 Barrels = 307.86 US Gallons
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Global Net Oil Movements
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Globalization of Natural Gas Markets
Source: BP Statistical Review of World Energy 2008
1 Billion m3 = 35.3 Billion ft3
= 0.73 Million Tonnes LNG = 0.90 Million Tonnes Oil-Equivalent
1.2
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Global Net Natural Gas Movements
Sep 16, 2008Page - 14 Holistic QMS Standards for the Oil & Gas Industries
Topics
Overview of the Oil & Gas IndustriesIndustry segmentation through the Carbon Value Chain
Globalization of markets and infrastructure
Complexity of projectsComplexity of projects
QMS Standards in PracticeChallenges for unified (holistic) QMS standards
Recent history of QMS standards for the oil & gas industries
Value of further harmonization of standards
Summary
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Complexity of Oil & Gas Projects as a Challenge for QMS* Standards
Many different companies employed for specialized skillsResource administrationExploration & drillingEquipment manufacturingPipeline constructionProduction operationsShipping operations
Geographically extended (global) supply chainsLong lead times for project completion
Typically 10-15 years from oil first discovered to commercial production (sometimes faster for gas-only resources)Frequent mergers & acquisitions involving participating companies
* Quality Management System (QMS), possibly including also Safety & Loss Management System (SLMS) and / or Risk Management System (RMS)
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Complexity of Oil & Gas ProjectsUSA Natural Gas Pipelines
302,000 total miles as of 2007
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Location & PurposeGulf of Mexico, Lease Block Mississippi Canyon 920Produce & gather 1 Bcf / d of natural gas and condensate from 10 different fields in 4 different lease blocks
Physical ChallengesDeepest setting for pipelines & risers: 8,000 ft (2,440 m)Deepest setting for a platform: 8,000 ftDeepest sub-sea production: 9,000 ft (2,745 m)15 sub-sea wells with 220 miles (354 km) of sub-sea flow lines Gas travels 134 miles (216 km) through Independence Trail pipeline to platform in West Delta 68, where it divides to separate shore bases
Production Start: July 2007
Graphic credit: RigZone
Graphic credit: Norsk Hydro ASA
Complexity of Oil & Gas ProjectsExample: The Independence Hub
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Complexity of Oil & Gas ProjectsExample: The Independence Hub
Co-OwnersEnterprise Products Partners LP (80%)Helix Energy Solutions (20%)
Producer GroupAnadarko Petroleum Corp. (Leader / Manager)Kerr-McGee Corp. . . . which merged with AnadarkoSpinnaker Exploration Co. . . . which was acquired by Norsk Hydro, which later merged into Statoil-HydroDominion Exploration and Production Inc. . . . later acquired by ENI Petroleum
Constructor ContractorsAtlantia Offshore LimitedHeerema Marine ContractorsAlliance EngineeringKiewit Offshore ServicesAllseas USA, Inc.
Development Cost: $693 M Graphic credit: E&P
Sep 16, 2008Page - 19 Holistic QMS Standards for the Oil & Gas Industries
Topics
Overview of the Oil & Gas IndustriesIndustry segmentation through the Carbon Value Chain
Globalization of markets and infrastructure
Complexity of projects
QMS Standards in PracticeChallenges for unified (holistic) QMS standardsChallenges for unified (holistic) QMS standards
Recent history of QMS standards for the oil & gas industries
Value of further harmonization of standards
Summary
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Challenges for Unified (Holistic) QMS* Standards in the Oil & Gas Industries
Long-Standing Historical SegmentationUpstream - Midstream - Downstream
Gas Industry related to - but not the same as - Oil Industry
Uneven GlobalizationRegional differences exist both in business practices and in preferred standards
Complexity of Large ProjectsMany projects (especially Upstream) are joint venturesA single prime contractor usually employs several different sub-contractors – a diverse workforce with various corporate cultures
* Quality Management System (QMS), possibly including also Safety & Loss Management System (SLMS) and / or Risk Management System (RMS)
Sep 16, 2008Page - 21 Holistic QMS Standards for the Oil & Gas Industries
Topics
Overview of the Oil & Gas IndustriesIndustry segmentation through the Carbon Value Chain
Globalization of markets and infrastructure
Complexity of projects
QMS Standards in PracticeChallenges for unified (holistic) QMS standards
Recent history of QMS standards for the oil & gas Recent history of QMS standards for the oil & gas industries industries
Value of further harmonization of standards
Summary
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Recent History of QMS* Standards for the Oil & Gas Industries
* Quality Management System (QMS), possibly including also Safety & Loss Management System (SLMS) and / or Risk Management System (RMS)
ISO/TS 29001:2003Detailed, sector-specific
requirements for:• Design• Development• Production• Installation• Service
-----• Emphasis on
independent assessments of:• Design reviews• Product / service
acceptance• Internal audits
API Q1 –7
ISO/TS 29001 plus API
admin req’s.
ISO 9001:1994
ISO 9001:2000General requirements with
wide applicability
ISO/TS 29001:2007
American Petroleum Institute
(API)
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Comparative Review & Approach to an Holistic QMS* Standard for the Oil & Gas Industries
* Quality Management System (QMS), possibly including also Safety & Loss Management System (SLMS) and / or Risk Management System (RMS)
BQ9000
API Q1 (7th Ed.)
CSA Z662.01-
07
ISO9001
-2000
ISO29001
-2007
7. Measurement, Analysis and Improvement (including Continuous Improvement)
6. Production and Service Provision (including construction and installation)
5. Purchasing
4. Design and Development (including selection of materials)
3. Product, Service, Project or Operation Realization
2. Resource ManagementASQ-EED Gas & Oil Committee’s Analysis:
Compare & contrast seven (7) existing standards, including special O&G issues
Safety & Loss ManagementRisk ManagementProducersSuppliersHigh-pressure equipment
“Harmonize” comparable elements to approach an “Holistic Standard”
1. Management Responsibility
European Directive
97 / 23 / EC
ISO29001
-2003
QMS Element (Harmonized)
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Harmonized Elements in a Possible Holistic QMS* Standard for the Oil & Gas Industries
* Quality Management System (QMS), possibly including also Safety & Loss Management System (SLMS) and / or Risk Management System (RMS)
3
12
1
6
9
8
3
No. Major Requirements
Implement procedures for monitoring, measuring and improving work processes
7. Measurement, Analysis and Improvement (including Continuous Improvement)
Develop, document and implement specific plans and procedures for delivery of services, including safety & reliability
6. Production and Service Provision (including construction and installation)
Implement procedures for control of suppliers and all purchased products5. Purchasing
Develop and implement specific procedures for design and documentation of design conformance
4. Design and Development (including selection of materials)
Develop, document and implement specific plans & procedures for accomplishing work
3. Product, Service, Project or Operation Realization
Assure that necessary resources are available and that performance standards are clear to employees & contractors
2. Resource Management
Demonstrate top management commitment and clearly communicate same to employees & contractors
1. Management Responsibility
Major ResponsibilitiesQMS Element (Harmonized)
Sep 16, 2008Page - 25 Holistic QMS Standards for the Oil & Gas Industries
Topics
Overview of the Oil & Gas IndustriesIndustry segmentation through the Carbon Value Chain
Globalization of markets and infrastructure
Complexity of projects
QMS Standards in PracticeChallenges for unified (holistic) QMS standards
Recent history of QMS standards for the oil & gas industries
Value of further harmonization of standardsValue of further harmonization of standards
Summary
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Value of More Harmonized O&G QMS StandardsStreamline quality assurance during “hand-off” of raw carbon or refined carbon commodities
Reduce variance among QMS standards along the Carbon Value ChainEnhance commerce by simplified administration of quality assurance
Example: Getting natural gas to the end-user
Upstream• Produce gas• Perform early
metering
Midstream• Remove impurities &
split liquids• Perform final metering• Ship to wholesale
markets
Downstream• Distribute to
retail markets
Examples of Dominant Influences Regarding Practices:─ Minerals Management
Service (MMS) or Bureau of Land Management (BLM)
─ American Petroleum Institute (API)
─ Federal Energy Regulatory Commission (FERC)
─ Gas Processors Association (GPA)
─ State Public Utility Commissions (PUCs)
─ North American Energy Standards Board (NAESB)
- - - - - American Gas Association (AGA) - - - - -
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Value of More Harmonized O&G QMS StandardsFacilitate Emerging & Evolving Interfaces with Other Energy Industries . . .
Electric-power generation, transmission & distribution─ Nuclear as well as fossil fuels
Coal mining industryDisposal of carbon “waste” (capture & sequestration)Alternative / renewable energy sources (wind, solar, hydro)
. . . And Their Traditional Sources of Practices . . .Edison Electric Institute (EEI)
Nuclear Regulatory Commission (NRC)
North American Electric Reliability Corporation
(NERC)
Environmental Protection Agency (EPA)
Emerging Standards Organizations for
Capture & Sequestration of Carbon Dioxide
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SummaryOil & Gas Industries Have Made Significant Progress Toward a Unified Quality Management System (QMS)
Functional differences between Gas & Oil industries have presented challenges for a single, comprehensive QMS standardISO/TS 29001 (derived from ISO 9001) initiated in 2003 but not yet universally adopted
Additional Value and Effort Remain in Further Harmonization of Oil & Gas QMS Standards
A uniform standard adopted along all portions of the Carbon Value Chain (Upstream – Midstream – Downstream) Additional progress will require collaborations among professional organizations that traditionally have influenced different portions of the Carbon Value Chain
ASQ-EED Gas & Oil Committee could serve as facilitator / catalyst for the industry-wide campaign